Loyalty Programs and Their Impact on Customer Behaviour

Abstract

The following paper examines the effect of loyalty programs on customer buying behavior. It strives to identify whether loyalty programs do have the power to influence purchase decisions and build customer loyalty to a brand. It focuses on the main factors which contribute to loyalty programs success or failure and aims to identify what type of rewards are most valued by customers. The first part of the report, the introduction, includes a rationale for conducting the particular research, its purpose, aims and objectives. It also summarizes the dissertation structure in brief. The second chapter of the dissertation consists of a critical review of the relevant academic literature and aims to identify theoretical ideas, concepts, theories and issues related to loyalty programs and their impact on customer bahaviour. The third chapter, Research methods, describes the different types of research which were utilized for the purpose of the project. These include both primary and secondary research, qualitative and qualitative data, online questionnaire and the convenience sampling method. It also draws upon other relevant techniques which were considered for the project and justifies the final methodology which was selected. The next part of the report, Research findings, summarizes the main findings from the primary and the secondary research. Besides from summarizing the findings from the literature review, this section also discusses the results from the online questionnaire, which was distributed to a total of 120 respondents. Finally, the last part of the report, the conclusions and recommendations, summarizes the main points which were identified while conducting the research, compares the results from the primary and the secondary research and points out several directions for further studies. It also provides a brief summary of overall findings and the critical success factors for designing effective loyalty programs which build long term customer loyalty and trust.